The ongoing war in Iran continues to disrupt the global aluminum supply chain, profoundly reshaping the supply and demand landscape of the global aluminum market.
Aluminum prices on the London Metal Exchange (LME) rose 0.5% to $3,426.50 per ton in early trading on Wednesday, hovering near the four-year high reached on Monday. The Middle East contributes about 9% of global aluminum production, and the conflict has led to significant reductions in local production; meanwhile, the Strait of Hormuz is effectively under blockade, obstructing both raw material imports and finished product exports. Aluminum prices have increased by more than 9% on the LME this month, with a 27% rise over the past year.
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Signals of supply tightness are being released from multiple dimensions. Rio Tinto reported a second-quarter aluminum supply premium of $350 per ton to Japanese buyers on Tuesday, according to media reports citing informed sources, which will be the highest quarterly premium level since 2015.
The Trump administration's inconsistent statements regarding the trajectory of the conflict have caused continued volatility in the commodity markets this week. U.S. officials signaled on Tuesday that military actions against Iran are still escalating, with little possibility for diplomatic negotiations, contradicting previous hints from Trump that the conflict might end soon, making it increasingly difficult for the market to judge the duration of supply disruptions.
<h2>The Blockade of Hormuz Devastates Middle Eastern Capacity</h2>
The aluminum industry in the Middle East is facing a double blow—conflict has directly led to production cuts at local smelters, while the blockade of the Strait of Hormuz has further severed the channels for raw material imports and finished product exports. This strait is a key route for Middle Eastern aluminum plants to obtain raw materials such as alumina, and the blockade has nearly paralyzed this supply chain.
The Middle East accounts for about 9% of global aluminum production, and the scale of supply disruptions cannot be ignored. Against the backdrop of increasing market pressure, the volume of canceled warehouse receipts in LME warehouses has surged significantly, with Bloomberg data indicating that this metric has seen its largest increase since May 2024, primarily driven by demand for deliveries from Malaysian warehouses.
<h2>Japanese Aluminum Premium Soars to 11-Year High</h2>
The aluminum premium at major Japanese ports is an important reference benchmark for aluminum pricing in Asia, paid on top of LME spot prices. According to informed sources speaking to Bloomberg, Rio Tinto reported a second-quarter supply premium of $350 per ton to Japanese buyers on Tuesday, if finalized, it would set a record for the highest quarterly premium since 2015—when premiums exceeded $400.
Notably, Rio Tinto had previously quoted a price of $250 per ton, but after the escalation of U.S. and Israeli strikes against Iran and the sharp rise in aluminum prices last week, the company promptly withdrew that quote and significantly raised it to $350. In addition to being a mining giant, Rio Tinto is also one of the world's top aluminum suppliers, thanks to its smelters in Canada and Australia.
The supply tightness has triggered a chain reaction among downstream manufacturers in Asia. According to Bloomberg, several Japanese automotive parts manufacturers have begun seeking supplies from Russian aluminum giant United Co. Rusal International PJSC to address the supply gap from the Middle East

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The Middle East conflict has caused 9% of global aluminum production capacity to be disrupted, and the blockade of the Strait of Hormuz has severed the supply chain, pushing LME aluminum prices to a four-year high. Due to the supply crisis, Rio Tinto's quarterly premium quoted to Japanese buyers has reached a new high since 2015. Although the U.S. government's repeated statements on the war situation have triggered market fluctuations, the reshaping of the global aluminum supply chain has become a foregone conclusion, with Asian manufacturers such as Japan being forced to turn to other sources to fill the gap

- The ongoing conflict in Iran is significantly disrupting the global aluminum supply chain, impacting production and prices.  
- Aluminum prices on the London Metal Exchange rose by 0.5% to $3426.50 per ton, nearing a four-year high, due to reduced output from the Middle East, which contributes about 9% of global aluminum production.  
- Rio Tinto reported a quarterly aluminum premium of $350 per ton for Japanese buyers, the highest since 2015, while Japanese manufacturers are turning to alternative sources like Russian aluminum to mitigate supply shortages.

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Middle East conflict disrupts 9% of global capacity: LME aluminum prices surge to a 4-year high, supply crisis intensifies